NBC News: Private equity firms now control many hospitals, ERs and nursing homes. Is it good for health care?
By Gretchen Morgenson and Emannuelle Saliba
May 13, 2020
In March, as the coronavirus gripped the nation, veteran emergency room doctor Ming Lin was growing concerned. Lin felt his facility, PeaceHealth St. Joseph Medical Center in Bellingham, Washington, was unprepared for the pandemic, so he went to his superiors for help.
Frustrated by their response, Lin took to social media, criticizing the hospital’s operations in a series of posts.
Days later, the hospital removed Lin from the rotation in the emergency department. He had worked at PeaceHealth for 17 years.
Under typical medical industry practice, Lin’s case would have been subject to peer review, experts said. But Lin’s employer wasn’t PeaceHealth. It was TeamHealth, a physician practice and staffing company that provides the hospital with emergency room services. TeamHealth is owned by Blackstone Group, a finance giant.
When a private staffing firm teams up with a hospital, the right to due process can disappear. Lin’s case was never heard.
“One of the objectives is to point out any deficiencies in the system that may harm the patient,” Lin told NBC News. “Because private equity has taken over health care, it has made that difficult.”
Blackstone, which bought TeamHealth in 2016 for $6.1 billion, is what’s known as a private equity firm, a type of financial entity that buys companies and hopes to sell them later at a profit.
Over the past decade, private equity firms like Blackstone, Apollo Global Management, The Carlyle Group, KKR & Co. and Warburg Pincus have deployed more than $340 billion to buy health care-related operations around the world. In 2019, private equity’s health care acquisitions reached $79 billion, a record, according to Bain & Co., a consulting firm.
Private equity’s purchases have included rural hospitals, physicians’ practices, nursing homes and hospice centers, air ambulance companies and health care billing management and debt collection systems.